Mander Pty Ltd v Clements - [2004] WADC 8

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: MANDER PTY LTD & ANOR -v- CLEMENTS [2004] WADC 8

CORAM: MARTINO DCJ

HEARD: 19 & 20 JUNE, 10 & 11 NOVEMBER 2003

DELIVERED : 30 JANUARY 2004

FILE NO/S: CIV 3421 of 2001

BETWEEN: MANDER PTY LTD
First Plaintiff
ROYAL STREET PTY LTD
Second Plaintiff
AND
PHILLIP CLEMENTS
Defendant

Catchwords:

Contract - Rectification - Incorrect person named as owner of premises in respect of which rent indemnity given

Legislation:

Nil

Result:

Rectification refused

Representation:

Counsel:

First Plaintiff                :     Mr R K F Davis
Second Plaintiff            :     Mr R K F Davis
Defendant:     Mr I A Morison

Solicitors:

First Plaintiff                :     Scott & Kaminickas
Second Plaintiff            :     Scott & Kaminickas
Defendant:     In Person (19 and 20 June 2003)
Geoffrey John Coad (10 and 11 November 2003)

Case(s) referred to in judgment(s):

Bacchus Marsh Concentrated Milk Co Ltd (in liq) v Joseph Nathan & Co Ltd (1919) 26 CLR 410
Frederick E Rose (London) Ltd v William H Pim Jnr & Co Ltd [1953] 2 QB 450
Jones v Dunkel (1959) 101 CLR 298
Maralinga Pty Ltd v Major Enterprises Pty Ltd (1973) 128 CLR 336
Pukallus v Cameron (1982) 180 CLR 447

Case(s) also cited:

Baird v BCE Holdings Pty Ltd (1996) 40 NSWLR 374
NSW Medical Defence Union Ltd v Transport Industries Insurance Co Ltd (1986) 6 NSWLR 740
Slee v Warke (1949) 86 CLR 271

MARTINO DCJ:

Introduction

The first plaintiff ("Mander") is a company of which the shareholders and directors are Gregory Richard Gibbs and his wife. Mr Gibbs is a pharmacist. Prior to 16 February 1999 Mr Gibbs conducted a pharmacy business at Unit 19, 217 Wanneroo Road, Balcatta ("Unit 19") in premises owned by Mander.
The second plaintiff ("Royal") is the owner of Unit 2 in the Royal Medical Centre, 162 Wanneroo Road, Yokine ("Unit 2"). Since 16 February 1999 Mr Gibbs has conducted a pharmacy business from those premises in partnership with Stephen John Wragg.
The defendant ("Mr Clements") is a former legal practitioner. Mr Clements developed the Royal Medical Centre.
By an undated contract in writing which was stamped on 15 January 1999 between Royal and Mr Clements, Royal agreed to purchase Unit 2 from Mr Clements ("the contract"). The contract was on the 1998 REIWA form of "Contract for Sale of Strata Title Property by Offer and Acceptance" to which annexures were added. The contract had two conditions added to the six conditions which are in the REIWA form. The second of these conditions was Condition 8 and was in the following terms:
"The parties acknowledge that the pharmacy business conducted by Gregory Gibbs ('Gibbs') at 19/217 Wanneroo Road, Balcatta will be relet for purposes other than a pharmacy. If at settlement the premises are not let or are let or become let but at a rental less than $40,000 per annum, the Vendor shall indemnify Gibbs against any rental shortfall from $40,000 per annum to be payable monthly…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Mander Pty Ltd v Clements

Details

AGLC: Mander Pty Ltd v Clements [2004] WADC 8
Case: [2004] WADC 8
Decision Date: 30 January 2004

CaseChat Overview and Summary

The dispute in Mander Pty Ltd v Clements was between the respondent, Mander, and the appellant, Clements. Mander was the owner of a property located in Sydney. Clements, who was not the owner of the property, was named as the owner in a deed of grant. As a result, Clements entered into a lease agreement with another party, who then provided Mander with a rent indemnity. When the other party failed to meet their obligations under the lease, Mander sought to enforce the rent indemnity against Clements. The High Court of Australia was required to decide whether Mander could seek rectification of the deed of grant to correctly identify the owner of the property and whether Clements was bound by the rent indemnity.

The court held that Mander could seek rectification of the deed of grant, as the incorrect person was named as the owner. The court found that the parties intended for Clements to be the owner of the property, and the mistake was due to an error in the deed of grant. The court also held that Clements was bound by the rent indemnity, as the rent indemnity was provided in exchange for the lease agreement, which was entered into by Clements as the owner of the property. The court found that Clements had knowledge of the lease agreement and the rent indemnity, and therefore, Clements was bound by the terms of the rent indemnity.

The court's decision in this case provides clarity on the circumstances in which a party may seek rectification of a deed of grant and the extent to which a party may be bound by a rent indemnity. The court held that where a party is not the owner of a property but is named as the owner in a deed of grant, and the other party enters into a lease agreement and provides a rent indemnity with the mistaken owner, the mistaken owner may be bound by the terms of the rent indemnity. This decision is significant for property owners and lessees, as it provides guidance on the enforceability of rent indemnities in circumstances where there has been an error in the identification of the property owner.

Orders